The agreement covers medication, medical devices, cosmetics and health products. It aims to guarantee the health of people on both sides of the Strait and promote cross-Strait medical exchanges.

The agreement includes: timely notification of infectious disease; strengthened disease prevention measures and handling of major epidemics; enhanced cooperation in pharmaceutical research and safety management; exchange in traditional Chinese medicine research and quality guarantees; and cooperation in handling medical emergencies.

Some 90 percent of the traditional Chinese medicine used in Taiwan comes from the mainland.

The agreement was inked at talks between the mainland's Association for Relations Across the Taiwan Straits (ARATS) and Taiwan's Straits Exchange Foundation (SEF), which are the two bodies authorized to handle cross-Strait affairs.

ARATS President Chen Yunlin said cross-Strait medical cooperation is urgently needed "given the increasing number of people and goods traveling across the Strait."

SEF Chairman Chiang Pin-kung said the agreement, together with the previously signed farm product inspection and quarantine agreement and a food safety deal, form a safety net across the Strait.

He said the agreement will boost Taiwan' s medical sector. Driven by the rosy prospects for the island's health care industry, most biotechnology shares on the Taiwan stock market have performed well over the past week, after the decision to sign the cross-Strait medical cooperation agreement was announced.

The island's health authorities also said in order to protect the interests of the local medical sector, the agreement does not cover the training of medical personnel. Nor does it allow mainland medical staff to obtain licenses and work in Taiwan or mainland hospitals to establish branches on the island.

Chen said the signing of the medical and health cooperation agreement signals an "expansion in cross-Strait talks to the social and cultural arena."

The two sides also reached a consensus on an investment protection agreement, an important part of the follow-up negotiations taking place after the cross-Strait Economic Cooperation Framework Agreement (ECFA) took effect in September. The investment protection agreement is expected to be signed at a new round of cross-Strait talks next year.

The talks Tuesday were the sixth in two years after the two organizations resumed talks in 2008 after a nine-year suspension.